Retailing Assignment

1) While at dinner in the dorm last night, a student who lives down the hall and is not a retailing major, told you that ?middlemen are economic parasites who intercept goods flowing from the manufacturer to final consumer to get a markup without adding any value. How would you respond?

2) As a manager for an on-line music retailer, you have been approached by your manager to develop a competition-based pricing policy. Your manager indicates that because your market is global and pricing of CDs varies by both product and delivery costs, he would like for you to develop a pricing strategy based on your global on-line competitors. Your manager believes that your firm could effectively compete on selection and service if only it could establish a pricing policy that would match competitors, thus eliminating their competitive advantage. In other words, he wants you to gather competitive intelligence from your competitor?s web sites to develop a pricing policy that in effect would make your CDs the exact same price (when delivery charges are included).

Prepare a response to the manager outlining your position on the potential legal and ethical implications of the strategy.

Solution Preview

1) While at dinner in the dorm last night, a student who lives down the hall and is not a retailing major, told you that ?middlemen are economic parasites who intercept goods flowing from the manufacturer to final consumer to get a markup without adding any value. How would you respond?

I will tell him that middlemen have an important function to play. They aid the distribution of a product. They help establish linkages in the market and develop contacts with retailers. Further, middlemen help the physical distribution of goods. They break the bulk down and send it to different retailers. They develop storage facilities and help store the products till they are needed. They help provide variety to customers and sell in smaller quantifies so that the needs of the market are satisfied. In short middlemen are not economic parasites but useful people that help match the goods produced to the customer needs.

2) As a manager for an on-line music retailer, you have been approached by your manager to ...

Solution Summary

This answer provides you an excellent discussion on Retailing Assignment